offered little comfort about the state of the U.S. housing market Tuesday, posting much-worse-than-expected results for the second quarter and warning of continued deterioration in selling conditions.
Shares were trading down 49 cents, or 1.3%, or $38.26.
For the quarter ended May 31, Lennar recorded a loss of $244.2 million, or $1.55 a share, reversing a year-earlier profit of $324.7 million, or $2 a share.
Revenue tumbled to $2.88 billion from $4.58 billion.
Analysts polled by Thomson Financial projected a profit of 5 cents a share and revenue of $2.59 billion.
"The housing market has continued to deteriorate throughout the second quarter," said CEO Stuart Miller in a statement. "The supply of new and existing homes has continued to increase resulting in declining home prices across our markets."
New-home deliveries, excluding unconsolidated entities, fell to 8,940 homes from 12,506 homes last year. New orders fell 31% in the quarter from a year ago.
Lennar said it had to lower prices to move homes, which cut into margins. Gross margins on home sales slid to 13.6% from 23.7% last year.
The price declines led Lennar to record $328 million of land impairment charges. The company has now written down 12% of its book value on an after-tax basis since the start of 2006, including 4% announced on Tuesday, said Bank of America analyst Daniel Oppenheim in a research note.
"We think the continued weakness should lead to significant land impairments across the industry in
the second quarter, but not all companies will choose to take the impairments at the same time, " Oppenheim wrote. "We think these impairments will likely continue through 2008, as lower home prices
resulting from the excess inventory will trigger further impairments."
Several other homebuilders, such as
, have indicated that sales conditions worsened over the recent quarter as the subprime meltdown led to tighter lending standards and the inventory of homes on the market continued to grow. On Monday, the National Association of Realtors said that the supply of homes on the market was at a 15-year high in May.
Lennar said it continues to see weak, and perhaps deteriorating, market conditions in the current quarter.
"Given uncertain market conditions, we continue to lack visibility as to future results, but we currently expect to be in a loss position in our third quarter," Miller said.